going to try to get some questions about early child care learning into the presidential debate how are we going to get them talking and then as far as the organization, how do we get the early learning in their? >> very good. we will turn to rob. he is ready to go i know. but helen will answer that question. >> i have an answer for you. >> helen will have the last word. >> i will let helen have the last word. the reason they got what they got is because they are organized. there were literally quite prepared to show up in the thousands and they did in washington, d.c. where it mattered. what has to happen is on the

weekends when parents can do they have to show up in numbers people can see. 5,000, 10,000 come out of state capital. that is what is visible in the that marks a change in the civic state share in the capitol sector. it's changed from being a recipient and passive and accommodative to be nasser def, aggressive and insistent that the country do with it should deutsch makes sense economically and servile. the reason it hasn't been done is the question of money is very clear. the second is the money question hasn't been expressed yet as a simple question. and further, it isn't quite

recognized yet how vitally dependent the country is on a trained and educated team oriented likable fund for the capitol population, young adult population. we haven't quite recognized the deficit we have their. as for the state level i think a lot has happened. we work of the state level and attempt to put together work of kids through consumption properly taken care of and educated and carried from conception to kindergarten. we are finding more and more business people who get the reality. the hour understanding with the situation as they are increasingly ready to take action in this area that supported salles solomon to resolve problems we find the

report last march from pre-que to the cost and difficulty through kindergarten provided to 100 kids yields the reduction in special-education alone. so what is -- there is that the state level this understanding to take place and people can act on it and it can be done on a school district level. so in many respects, the power of technology and communications for this enabling people and local levels to act in ways they cannot at federally and as the act in the region and the state level it becomes then clear of the federal level what needs to be done, so from my standpoint, the beginnings of this process

are sufficiently still new that it would be assertive third reason why we would be surprised by wife this relatively inaction of the federal level but at the state level a lot is going on. what lisalyn and dave are doing is informing this and energizing it to make it easier at the state level. >> why >> let me first give the most simple answer to your question him something everyone can do when they leave the room. go to the web site, www.loc.org. there is one box that shows you how to tweet and twitter of the debates and ask them to ask a question about reducing poverty

and addressing your early childhood child care. you can do that, all of your friends can do that. it's easy to get enough people to do it. there's also a map that puts child care on the map encouraging to get state elected officials and federal elected officials and to the child care centers and they can put a pan on the map. i agree with we have to use more of those techniques in the reauthorization and we have to be more demanding to but i also believe this is a campaign in the congress that is definitely a challenge to get anything constructive said. we have to push more but i would disagree i think there is an interesting activity going on in the state but i think there is a lot of shella activity going on

and very serious situations in terms of what is going on for the state funding and early education and in some places where it may look good systemwide it's very precarious, we will be able to maintain in terms of a strong early childhood system. but my final remarks since i was allowed to have the last word is to the business leaders and i would urge all of the business leaders that have increasingly stepped up to support early childhood to also step up to the tax-writing committee and point out all of the tax loopholes we can close and all of the tax increases that were in absolutely liable the will provide the revenue that we need to provide the early childhood system with our children and families deserve. i think that is doable. >> join me in saying thank you

to all of the speakers today to the [applause] thank you. we have our marching orders not. thank you to the kec foundation and c-span for joining us today. br adjourned. have a good afternoon. [inaudible conversations] the potomac institute for policy studies at arlington va recently held a discussion on supply chain risks posed to the nation's cyberinfrastructure. government officials overseeing cybersecurity and the former acting senior director for cyberspace at the national security council were among the speakers at this to our event. >> ladies and gentlemen, if i could have your attention, please.

my name is mike swetnam and it is my distinct honor and privilege to welcome here today for the seminar on the supply chain threats a cyber issue that we have been discussing in and around washington for quite some time to read the potomac institute, for those of you that have not been here before, is a science and technology not for profit policy think tank if you will win the washington, d.c. area that focuses on how science and technology affect the national security. for quite some time we have studied issues in and around what people callasymmetric threats and most importantly, terrorism. this past year professor alexander and i released our second volume on al qaeda about 11 years after the first volume on al qaeda right before 9/11, and we would like to call your attention to it. there are copies available year and of course available on the

web at amazon always good things and i want to highlight it today because it is more of a gift we are going to give to our panel members for taking the time of their busy schedules to the very least i can promise you a good sleep if you read it. [laughter] the second look at the potomac institute has been involved in over this past year is an effort with the bechtel corporation to look at the cyber issue, in particular the seibu doctrine. that volume edited by tim and i is in the publication of you have on your seats and a short flier that symbolizes what is in that volume that could be out shortly and the copies are available if each one of you as they come out of the press. i would like to know to the port is one of the authors in this

volume and contributed not just to the cyber discussion this year, but of course more than a decade since the issue. the potomac institute as a mentioned before is involved in the discussion of science and technology as it affects the national security. it's been our goal, sort of 18 years of our existence to help be in place where the discussion can be held in a forum that encourages the development of the policy based on good academic scholarship and and put. your participation today, not just in this industry because of interacting with them, taking away what they said, the publishing and being involved in the contributing yourself to the issue we think is of prime importance. it's only the interaction of all of us come by and that we could hope to address issues as full as that of the cyber issue in and around washington, d.c.. a quick note to before i turn this over to the moderator today

an electrical engineer at least i was some 30 years ago when i got a degree. it's probably not worth anything today, but the issue in electrical engineering was the discussion between the hardware guys and the software guys. who is at the fault this isn't working and the hardware guys always blame the software guys and the software guys always complain they are having to do things to work around the poor hardware design. today we have well, i guess we are in the fifth come sixth or seventh year of the four most federal program to address the cyber issue probably in our second going on third decade of recognizing that we have a cyber issue and from my perspective we are doing a fair job of addressing the potential threat from the software side of the queen only to discover that yes there are hardware issues as well. without addressing both sides of

the equation, and they're very different, software comes and goes and needs responses on the area. hardware is running for a while and it's hard to address in the issues in and around harvard and software. only a complementary approach i would come and will help us really solve the issue of cyber threats. a whiff of that, let me turn the podium and the forum over to the retired admiral who will lead us to what i hope will be a very lively presentation and discussion of issues surrounding cyber. thank you all very much for coming and i would encourage you to be involved continuously in this issue. your input is very important. thank you very much. [applause] >> thanks, mike. im jamie barnett.

welcome and thanks for taking time out of your busy schedule to be here, and also the guests that reviewing this on c-span and on the web, we really appreciate your presence and part of this discussion. this is my best audience that we have here coming and i know that you are also here to hear this amazing panel of speakers, which we will get to very quickly. i had the opportunity to address the supply chain problem in particular the communications supply chain while i was chief of the public safety homeland security bureau. i got to work with some of the folks in the audience and i appreciate your presence here. when i got here and started to talking and realized the potomac institute is a tradition involved in the defense supply chain and how it matters this symposium seemed appropriate and timely and one of the missions as he mentioned that the potomac institute is to elevate the policy discussions on the matter is of critical when portents to the nation.

from not going to speak today to defy dewitt will only be to fill in for the deputy assistant secretary of, and security who unfortunately had to cancel at the last minute. i did have a short article you'll see on the front table and it's also on the web site, but the supply chain threat is as much a matter of national security as it is cybersecurity it's part and parcel and in some ways it is as difficult if not more difficult is ongoing in washington to address this nation needs a couple some discussion of how to approach this matter with the real concerns are even before we get to what the answers are it must be recognized as a threat. it must be recognized the status quo is not acceptable and it's not even possible. it's not going to remain the same one we were a mother and we must recognize the government interest and supply chain manners and private companies is a concern especially for private companies. what is the proper role for government and what are the incentives provided to the

industry? the most important question what will be effective? you have a large agenda and we have our keynote speaker and i will then introduce each one of the panelists and we will hold questions until after all have spoken but then i do encourage a lot to ask questions and i first did it to a few questions first and then open to the audience. i would ask you to use the microphone. if you don't use the microphone that might be harder for the guests on the web and on c-span2 here you. i am very pleased the symposium is being hosted by our partners of the national security partners which provide outstanding service to the intelligence community. and with us today is the president of the national security partners who will introduce the keynote speaker. brigadier general mcfalls as the president of national security and first president of nst and service delivery to the

company's various federal communications customer. as program manager and lead consultant to national security agency, has provided a post of services. he's previously with the contract support of the director of planning and performance providing corporate vision, strategic planning and performance metrics assistance for the partners in the early relations member of the intelligence community. while on active duty in the united states air force, general mcfalls served on many assignments including director of operations for the air training command, deputy director of the air force that this liaison and commander to the air force's largest f-15 unit, the tactical fighter wing. he is a bachelor of science and aeronautical engineering from the united states air force academy. i think i've heard of them somewhere. in the masters of science and aerospace engineering in the university of michigan. would you welcome general john

mcfalls. [applause] >> i didn't know that part was happening because i had the easy part. it is an honor and privilege to introduce the keynote speaker today and for the company that jian-li was just talking about, the national security partners to be affiliated and co-sponsored with this very prestigious and influential organization, the potomac institute for policy studies. as the tagline states behind me we are difference makers. national security partners have been supporting many of the organizations that are represented in the room as a lot of of the audience here for several years. but today jamie said say something nice about dennis bartko, who was known and the team supported for five years or so, so let me go with that. as the nsa director special assistant for cyber, he leaves the cyber task force. when general alexander selected dennis, he obviously knew the

same things that i am about to tell you because dennis started this organization way back in early 2007 and he still is a leader. as you probably saw from when you signed upon the web to attend today's symposium, dennis is perfect for this job. he's a technical expert, he's an electrical engineer and cryptanalysis expert. in fact, he is a proud card-carrying member of what we affectionately and respectfully refer to as a crypto mafia combined with his neighbors experience serving on capitol hill within congressman robert's what does it of stuff followed by his tour with a private sector and atlantic communications. this makes him very well-rounded and diversified for this job. even before that, those that really know him will remember his musical inclination is playing drums for his high

school rock'n'roll band their royal flush. when we get to the questions you can ask what that means. he also had much longer hair than he has now. [laughter] he is the martial arts black belt, devoted enthusiast and just an overall fascinating guy. but as you can see, i have been in a long time and dennis has got to be in the top three to five of the inspirational leaders with whom i have worked over my career's. he's the epitome of all of the great business leadership books that you may have read, and he is truly the level five leader that is described in jim collins good to great books. that's not because he doesn't have an ego but his ambition is first and foremost for his institution, his agency and not himself and he ends by years of his team to reflect the

philosophy. over the years he has gained respect within all persons of the federal government to deal with cybersecurity if she is routinely sought after for his prelude opinion on all things cyber, and that is why the potomac institute asked him to kick off this event. a humbled inspiration inspirational leader with technical expertise to understand the most complicated cybersecurity subjects, politically savvy to make his team sensitive to all of the varied perspectives and vision to directly support his agency's since philadelphia it doesn't get any better than this beautiful ladies and gentlemen, george dennis bartko. [applause] >> thank you for that very kind and generous introduction. and also, thank you to the potomac institute for the invitation to be here as a part of this great panel and all of

the folks that are here. as the director of nsa, general alexander also commander of the united states cyber command, says it takes a team to address the challenges and issues that the nation has in cybersecurity and no one individual, department or agency or the government itself can address those challenges. it takes a team that includes the private sector, the government industry, our allies and our citizens to all come together and address those challenges, so i think it's appropriate that we would and together here today to have a dialogue on a really important issue, which is the supply chain challenge gindin formation communication sector and this threat is then important and complex issue for which there is no simple solution. and it is going to take a team effort to address. i haven't had the invitation to come today.

i started thinking what is it that i could actually contribute to the discussion with individuals across the sectors from being on the panel or from being in the audience here would be officially you to help this discussion. as i thought inspiration really came over dinner with my wife but we will get back to that in a little bit because nsa is appropriately not an organization that sets or mix policy. we are taking our mission as intelligence and information insurance and the space which has become what we now call a cyberspace, and it is from that experience and especially from the experience that we have learned in the information assurance mission that i hope to share and contribute to this

discussion that is being held here today. specifically, what is this space? why is it important? are there incentives and attributes that we should consider as we are discussing solutions in this space in if there are what are the responses we as a nation may want to consider in accordance with those and who might be required to do it? so i am going to take that approach with just a couple of minutes even though it might be a very high level, it might be something as everyone of you know that often to start a discussion it's in importance to start from the same context. our deputy director at nsa often says to the answer of what is cyberspace, cyberspace is our

nation's stores its treasure and its wealth. our treasure being the intellectual property information created by all of us across those different areas that we talk about in the private sector, the industry, academia and beyond. and our wealth not being so much the money that we print, but the bits and the databases that actually represent that and the space that we call a cyberspace actually has been good for everything that we carry out in the values of the nation, the national security, the economic competitiveness, the public sees the end of the civil liberties. but at the same time we wouldn't be here having this discussion if for all the good the space has enabled and there were also challenges and threats. and those threats come in a number of different directions

and a number of different ways. they come from sets of factors, some actors who are in that space who don't share the same values that we do in this space. it comes from various techniques and tools that can be used which are increasingly popular in the lexicon as a nation from viruses to the denial of service attacks but it also comes from a series of the factors and from inside fritz that can be done over remote access through networks and threats to the supply chain which brings us here together today. and as we contemplate and think about the supply chain threats and the challenges in that domain, i would like to share the three attributes with me at

nsa to believe if we had identified as a part of our time and experience in this domain. there may be more, but they are something that if we used when we think about challenges that we face in order to determine the solutions, probably good solutions to the problems that we might have. the first attribute is convergence. when you look at the space perhaps any single one attribute that is most important is the fact of convergence. a different things that separate coming together to make one. in fact, cyberspace was created in separate elements that were converging over time increasingly that became this thing that we call the internet and why the cyberspace. there might have been at least three levels of convergence that have been taking place. the convergence of the connections in this space which are separate depending on the media that might have been communicating that we are making

a phone call and you were watching a video on tv and the text message that is converged whic to another level of convergence in the devices that we used and we used to have these separate devices to get access to value the communication links and now the devices are able to collapse and converge and many of us carry around smart phones, tablets, devices they are essentially all that can handle all of the communication means in the foreign factors and shapes and that is leading to another convergence of how we can all gather and have discussions not abandoned by geography but to bring together much opportunity for the wide-ranging international and across the nation discussions and collaboration on activities. so, we see the convergence house

and important and continue a suspect in this space and if it is in fact one of the attributes to this base, then we believe perhaps the appropriate response to the convergence is integration. that all of us who are working in this space need to actually integrate our efforts to the greatest extent possible to bring together everything that our nation can to address these challenges. the second attribute is pretty simple. it's continual change. we know in this space that cyberspace is not going to be the same tomorrows as it is today. it is continually changing in the evolving and if in fact that is true, then our response, what ever it might become needs to be agile but it may cause us to think if we consider the use of change itself as an appropriate response to the challenge of the continual change in the space.

third is very important. there's huge amounts of information in this case. and if there's a huge amounts of information and the space of all different types and types of the media it is most appropriate response should consider how we share information between ourselves in order to address the challenges in this space. and information sharing is an appropriate response to the rate of information in that space so if the space has these attributes with these responses there may be more these are ones that we think might be helpful as we have a discussion on threats in the space and the responses to them and putting the supply chain threats that we are discussing today. ..

might be similar handled i was looking down at dinner who was in front of me. when you sit back and think, food we have is something that each of us know we need. it's essential. right. and that each of u.s. trust. that comes to us in a way that

is safe for for us consume. and in fact, there's a lot of great work that's done to try to work and ensure that food safety. and in fact, the food its is becoming more internationally available been internationally are disruptedded. when you look at cyberspace, i'm not saying in particular way it has become as important to us as food. depending on who you are and what you do, it's feeling very much increasingly important and just like food, we're having an increasingly globally supplied cyberspace in the infrastructure that we depend upon. and similarly, for all of those who use cyberspace, it's somewhat challenging and somewhat to know whether or not that the cyberspace you're using is safe and secure and it can be

trusted. and so we have to often rely on others to help ensure that safety, security and trust. and so again, one analogy will never always fit, but even things that we would apply in that domain such as understanding what the risks are, right. taking action to try to address them, and having plans that you can put in place if those risks actually come to pass are probably also appropriate things for us to dialogue and discussion as we talk about supply and chain. i thank you for the opportunity to provide what i hope was useful framing discussion for the dialogue that is about to take place. i'm honored to be sitting on the panel who are very thoughtful and worked the policy on the issue across the board. some of which, i i've had the blessing to work for a number of years with. and i look farred to the

dialogue and discussion because, again, in supply chain, a complex and important issue one that's going to defie a simple solution is going to be the diversity of thought that we all bring together to the table that will helpens make the answers of the solution real and possible. i appreciate the opportunity and look forward to participating. [applause] [applause] >> dennis, thank you so much. we appreciate your presence and thoughts here. we're also very pleased to have brett lambert with us today. he joined the department of defense in 2009 as the deputy assistant secretary. mr. lambert serves as principle adviser for the undersecretary of defense for the technology and logistics on all matters relate to the defense. he was awarded the secretary of sense medal for the work in the current position. prior to joining the od he spent

twenty years working on defense and intelligence firms from 1989, until 2007 he held positions at dfi. and the assistant selling in 2007. he served as executive vice president and directer during the period of time. and while at dfi he also lead the companies work with the first frontier defense firms, private equity organizations and merger an accusation market advisory services. he attended graduate school in india, on a rotary scholarship he receive during his senior year at kansas state university. he works in independent journalist in india, pakistan, and burma. he served in the political my tear group. would you welcome defense

assistant secretary of defense brett lambert. [applause] [applause] >> thank you, i appreciate. it's too easy. i can't go without saying so you give us food for thought. [laughter] but thanks very much for having me. i'm particularly pleased to be here at the po tow mack -- since i joined the government i insights, paper and products from is really a source for unbiased forward leaning thinking. on a wide varietity of technology issues that often confound us certainly inside the building and i don't think they debt get the daily recognition they deserve. if it's any consolation, i try to steal from your products as often as possible because they offer a tremendous amount of insight. and i also want to thank you for the steve who is here today in

the our office working on a number of manufacturing issues particularly as they relate to the supply chain. for this part of it, before we get to the q & a. i would like to stand back a little bit and try to frame the specific threat of cyber in a larger context. the overall industrial base supply chain we face. i look around the room and i know i have spoke ton many of you one on one on the tough challenges we face in the supply chain. hopefully what i'm going say today won't differ from what i've told you privately. let me start at the very beginning with an attempt to define the defense industrial base supply chain. it's a term which is often used both inside and outside of government. but rarely in a way that accurately depicts trail if i on the ground. defense industrial base is come priced a diverse set of companies that provide products and services directly and indirectly to the national security agencies including the

military. referses to defense industrial base, that implies some monolithic entity are are not useful. they include companies of shapes and sizes resourced from around the globe for the public companies to the sole proips to -- they lead to the private contractors many times ten or fifteen times removed. companies any tier and any size offer critical or hard to make products that lead to the systems by the war fires. some products and services services are sold by the companies that are truly unique to the defense applications. but most center substantial levels of nondefense demand or even sold exclusively on commercial terms such as the supplier may not know the product is used in the military

system. and like wise, the department may not know if defense primarily on a commercial component. finally, why the pace of innovation is extremely rapid in some things across the defense industrial base up as i.t. oh segments are based on mature technology where it is less important to the department. there's no single is deference industrial base. there's a defense market that is serviced by adverse selection of companies which span and often reflect the greater global economy for goods and services. i liken it to the maul of americas. you have anchor stores and big names you recognize the big names in aerospace and defense. you have a few stores you might recognize as international changes. and literally hundreds of other stories when you walk by you think who would buy from them? we do. we buy everything. we buy erg from ships to shoe strings, and from services we

buy everything from mowing lawns to the highest cybersecurity analysis. what's important able the able gi even the stores that aren't familiar to most, in fact the entire mall represents a small portion of the over all supply chain that provides the components and software necessary to stock the shelves of every single component and weapons system we field. the u.s. military superior operational capabilities are enabled by the diverse base and for decades the united states has commandedded a lead in the quality and quantity. and in the military capabilities of the products that flow from this work. however, the advantages that have been able to america -- deference technology are frankly not a birthright. and the key element of that base are necessary to ensure u.s. dominance on future battle field must be sustained nurtured. the supply chain is critical to

equipping our military with superior capabilities and a strong technologically vibrant and financially successful supply chain all the way down is therefore in the national interest. there's one more important truth we have to recognize. at the end of the day, despite spending over a billion dollars a day, we in the pentagon don't actually build anything. rely on the sphrail supply chain to develop, build, and ultimately maintain the goods and services upon which the war fighters lives depend as well as the lives of the citizens they defend. so with that in mind, let me turn to the three currents i see courses through the changing industrial base supply chain. simply put, our base is more global, it's more commercial, and it's more financially complex. the real city truer today than it was yesterday. and it will be truer tomorrow than it is today. the defense industry in the suppliers that it is made up of are constantly changing and adapting to the department rierpts, and conditions set phot in the commercial marketplace.

this evolution in the base brings with it new and difficult challenges. and it begs for a flexible, adaptive approach to the ever changing realty on the ground. outdating con instructs of the estatic where the u.s. government could dictate certain insurances or impose flexible rules must giveaway to the facts on the ground that the base is no longer a sing -- policy must take this these in to account and develop a more sophisticated and nuanced view of the base. the goods and services the department relies upon reaches far deeper in to the overall global economy than most appreciate. there are unique items for us, the items themselves often reply upon a complex supply chain of providers that are restricted or comp prized would jeopardize the

-- on ongoing bay pips so let's tart is the first reality which is the basis more global and we must recognize the implication of the increasingly global marketplace which we operate. more and more the advanced goods and services upon which we rely are produced by firms that were not found in the united states. also challenging is much of the supply chain familiarly lower tiers and information technology are provided by firms from countries that are not our closest allies. now buying from a more global environment offers many benefits and increases competition and thus reduce cot cost. it allows for the introduction of new technologies ab cob accepts and supports coalition war fights efforts or makings them less difficult to execute. we can benefit from the lessons learned in efficiency gains from other nations who had militaries that face difficult financial services and forced to drive home the own, quote, better buying power initiative.

globalization is frankly not an option. it's a reality. but while buying from a more global environment officers many benefit to the department we must be aware of the significant risks risks. these include but are not limited to the main reason we're here today. the threat of counsel fit or interior parts entering the supply chain, the potential for undue reliance on actually con configuration may not be understood. or the risk of leaked intellectual property to foreign businesses and governments. when it comes to articulating the failure of policy on the subject, particularly as a relate its to cyberspace. one look no further than the panel that is here with me today to give you a sense of the potential devastating consequencingses. the second key feature is linked to the one i described is the the increasingly many of the segments vital to defense are commercial in nature. this is a threand department the

is frankly more willing to recognize in policy than in practice. i would hasrd a to guess 25 years ago, nearly 70% of the defense the department procured were developmented and produced for the develop. today, i would suggest that the ratio has reversed with roughly 70 percent of the goods and services now either produced for commercial consumption or originally developed with commercial applications in mind as well as a largely commercial base supply chain. this is a very difficult concept for many in our business to get they're their arms around. frankly the department is more comfortable being the dog not the tail in the market. this attitude frankly is not helpful when we discuss the various ways to understand or traffic our supply chain. simply putting with the old standby remedy to most concerns mandated won't work in the modern global and comirm environment. we must adjust to deal with the new reality. as i have stated before, despite

our financial resources, we in the department build little. our industrial base does both military and commercial. and the department simply can't afford to dominate or prop up every important domestic industry upon which we rely through the supply chain. it's not economically feasible or strategically desirable. -- i'm not going get started with that. maybe in the q & a. it the dod will certainly continue to support the niche elements critical to the national security. we must better understand what they are. then buying from commercial firms, secure commercial firms allows us safe money to dedicate and supporting the you anemic items and that -- but in can incorporating commercial product is not without the own set of challenges.

through the supply chain means breaking down many of the bureaucratic barriers to entry which exist in the department. and i recognize the top manager of companies are put off particularly in the telecommunications market. by the political and government -- induced complexity as a regulator and a buyer. it occupant occupies a lot of my time. i try to remind the executives in the telecommunications companies that while uncle sam may not be the favorite, he is the single richest one you will know. nefn these trying fiscal times. to encourage more commercial participation, the department is striving to incorporate more commercial practices and products in to processes wherever possible. risk of such an approach. the not to the end products but

throughout the supply chain. more over, we must understand that dichotomy of the approach and the hazards associated with. on the one hand the key attribute allows for a steady long-term supply base and sup play chain are the high barriers to entry the market opposes. as we lower the barriers for the comervel and technology logical reasons such as ease and entry and exit access to more advanced technology and increase competition we do so with the risk of disrupting that which made some of the industry unique and opens us to the manufacturers and supply chains who have smarter term interest which the department may be concerned. the third trend which i won't spend time on today in the industrial base, i would like to highlight is the growing complexity and the importance of the financial sector that supports the entire supply chain from shifts to shoe strings. that. i have a vital and overlooked

role to ensure the healthy and viebilityd of the entire supply chain from the small schedule start-ups, to the debt market which support the base through access to capital programs the entire supply chain could not survive without access to capital on a exeat five basis and as is the case with the supply chain generally the financial sector is becoming more complex, more global, and more problematic by the day. the common theme running through the trends is the ever increasing complexity of the base and our supply chain. those are the facts on the ground, the problem is not getting easier. it's becoming more compression by the day. i look forward to getting the answers to take back with me to the department during our discussion. [applause] [applause] brett, thank you so much. i'm sorry that bobby was not

able to be with us today. and i mentioned to you this is not only the one of these types of similar pose ya we're going to have. we concentrated on government this time, next time we may have more industry, but maybe bobby simply can join us at that one. you can look forward to that the future. right now we're pleased to have me melissa hathaway with us. someone a number of people who came to advice me when i was --ed a maze advise me when i was at the fcc. her company brings multiinstitutional perspective to strategic consulting and strategic formulation of public and private sector client. and she's got an eye watering resume. i'm going mention a few things from it that i understand. she's been on the board of directors of the east west

substitute. a member of the counsel of experts for the global cybersecurity center in italy. just it goes on and on like that. mrs. hathaway provides strategic device to the united states government interpoll numerous other governments. she's worked and participates and tribute to a joint myth harvard project developing meths to measure, -- in cyberspace she's a regular guest lecture at both of the universities from 2009 to -- february 2009 to august 2009, she served in the obama administration acting senior directer for cyberspace. she's assembled a team of cyber experts to conduct the sixty-day review of cyberspace policy review. in may 2009, the president

presented the elegant group blueprint on cyberspace and under mrs. hathaway's leadership conducting the review of the tremendous work, she was continued to do things. he's worked in the bush measures for many things recognized expert in the world. and we are very pleased to have with us and please welcome melissa hathaway. [applause] [applause] thank you, jamie. i'm honored to be here, and mike, thank you for your leadership in the particular area. we the substitute is known for the tranlating complex -- translating complex technology issue fors for more simple terms for the policy makers. they were a strong partner while i was working in the bush administration to help us have a neutral ground to have the

conversation about cybersecurity in the needs of the nice -- nation and helping us with the forward-looking forward policy speftd. thank you again for hosting this today. i'm not sure how i can follow dennis and brett they were amazing. and so i'm going to take a little bit of a different perspective, and talk about the supply chain from historical and today and i'm hoping it's going to compliment my other twoest teemed colleagues. i'm going to start with a little bit of history. i'm going to fast forward it. back in 1969, in october, we're almost not too many days away from the anniversary of the very first transmission of the internet, and october 29, 1969. that was the beginning of the

opening a lot of the conversation we are having today. the dependence on information communication technology. the dpeps we have only the essential services on the internet today. and it became very and more of a reality as we developed and enhanced technology and 1985 as steve will tell you in the audience, we opened up and created the dot.com domain and other top left domain. it became a platform for e commerce and we are the worldwide web and allowed easier search for information, and enenabling more and more communication technology innovation. and in the coming years, our governments edge braced that ict dividend for the hope of the that economic growth and productivity that it enabled and

for the innovation agenda that it enabled an when started to put more and more of the essential services on to the fact zone of the internet. today we have e banks and e commerce riding on the intrntd. we're moving toward a future of having the energy distribution on a smart grid connect requested internets. we're moving to a generation of next generation aviation and air traffic controller that's controlled by the internet and over the internet. and so we have moved so much of our essential servicings on to the internet and one has to ask, is that what it was designed for? and is it secure for what we need for in the future? this brings about three tensions i'm going try to stick to three. so three tensions that we're seeing in the policy world. and three tensions that we've seen in the technology world. the first is we're seeing a tension from the need from the

economic policy to stimulate the economy versus the demands for national security. ict and the economic growth that the internet commerce of our country is measured nearly 4% gdp growth. that's the smallst in the nation right now. that's what the g20 countries are expecting. developing nations are expecting the ict and the e economy to contribute to as much as 10% of the gdp growth. and so we're going to continue to embrace the internet and the economy and ict. in order try to drive that growth whether it's job growth, productivity efficiency. we lead expect to lead it to 40% of the productivity by adopting that technology and embedding the next generation technology in to the infrastructures and our enterprises. the second tension then is an evolution from the first.

and it's we're talking about infrastructure modernization. infrastructure modernization is where we're actually moving more and more of the essential sfts services to the internet-based backbone. whether it's smart grid or water distribution or oil and gas distribution, whether it's the aviation system. most of our essential services are embracing and embedding the next generation technology in to the infrastructures. on the other side, though from a policy speftd, we're looking far how do we ensure that critical infrastructure protection that if so we can deliver the service they're not vulnerable to attack come through internet or over through the supply chain and how do you manage those risks? and those risks to becoming k in to standard minimum standards of care and the discussion we're talking about that is happening all around the world of should we regulate these infrastructures and these

businesses more to deliver a minimum standard of care because the vulnerabilities that have been adopted through the ict. the third tension from technology and policy perspective then comes down to who is in charge? is it public sector or private sector? the public sector is here to actually contribute to public safety, economic well being, and overall national sovereignty or national security. they are responsible, the government is responsible for ensuring that we have those essential services delivered to us. but at the end of the day, it's all about the private sector. the private sector designs, builds, delivers, and operates all of those infrastructures and it's in the event that there was a problem, the private sector is responsible for the actual recovery and restoration of that infrastructure. so then comes the policy

debate. we have both are in charge one is responsible for assuring citizens safety and those essential services and the other is responsible for really delivering it. so how do you actually then make the policy a reality? and i'm going to talk to those as far as we look at if you need a mix of policy levers and market levers and we need to take a broad look at what that is to ensure our competitiveness in the global environment. and i can talk to the mix of market levers that we need. so from there, that history, i'm going talk a little bit about the supply chain and how this comes together. the supply chain management is about the movement of raw materials in to an organization, the internal prefer faces of those materials to finished good, and the distribution of finished goods to the end customer. again, three processes.

supply chain professionals and those that have to work with that. we design and manage the product, the information and the financial flows that businesses all businesses run open today. again another three. today companies worldwide are levering those supply chains that global supply chain and those mix of processes through procedures to gain competitive advantage. the competitive advantage might but the raw material actually exists in another country. the competitive advantage might be the price point for labor it's cheaper in another country. and the advantage could be that the fact that the product or the integration of that is easier to assemble and integrate in another country because of the environmental laws or other laws are more supportive of the needs of their businesses and deliver product to market. so with that, then we are looking at another set of

tensions. we are expecting the global supply chain to be available at all times. to enable from an ict perspective our confidentiality of the businesses and then we're demanding those products maintain their integrity. it's no mistake that i'm using the confidencialty integrity and available of information assurance, that's in many ways we're talking about the three tenants of information assurance we're not worried about the integrity of the products coming in to the global supply chain that might comprise the businesses or confidentiality so software behind the actual stuff.

the products are being built, delivered maintains, upgraded all around the world and they are vulnerable to opponents who wish it harm. to manipulate the product through the design through the life cycle. and adversaries that may have access to those particular networks or designed to have accessn'ting access to whatever part of the target is target-rich environment. and so we need to recognize that there is a whole process involved. many of the times when we're talking about supply chain risk-management. we're talking about and thinking about once we got the product to market and how do we secure it? there's a whole evolution of rules and responsibility of that product life cycle and the supply chain. the design.

..

>> they were integrated, the components in multiple countries. and that becomes the particular product. anyone of these computers or smart phones that we have, it has lightly touched 40 countries along the way. is it really possible to talk about an indigenous manufacturing movement? and the distribution, we need to think about secure distribution channels. but again, it's multiple components coming into another component that is going to the market. and when we think about that

distribution channel, we need to give the vendors credit. they actually have vetted the suppliers. we need to use their trusted channel partners. their value added resellers and or buy off of the vetted tables of gsa. at the end of the year, since today's the 25th, i think there are some people who might have an extra thousand dollars or $2000 to buy whatever products, and i'm talking about the government. you may not want to go to gsa at this point because you can't actually securer this the last five days of the fiscal years. a gray market or counterfeit product will hit ebay and you go on into one of the non-trusted channels.

then we need to conduct operations. we have all of these products and components and we have our enterprise and infrastructure, and we are going to hope that it is all assembled integrated into these components. the operation requires best practices and operation assurance policies. the 24 by seven uptime was part of the security processes taking place and it is also available and trustable to take on those vulnerabilities. simple information assurance controls help manage or reduce that risk of operation. and that is an essential handoff of one thing to deliver that

product to market and we are going to operate it with what the industry says is the best way to do so. then we need to maintain it. the fifth part of the supply chain lifecycle. we need to confirm the integrity of the network and we need to continue to confirm the integrity of the network. what does that mean? sometimes we outsource and update the networks. sometimes we have just automatic updates, like what happened this past tuesday. we need to ensure that we do not automatically do that passing through the outsourcing that is inadvertently corrupting enterprise. we talk about the supply chain integrity and managing the risks that has a management structure

along each of these assets. finally, we will retire part of these components. for citizen services, we are actually handing over the used an older components and we are giving them away to developing nations. well, the information, while you may have thought was part of the race, it is part of the audience and were online, you know that we can pretty much recover that. you will eventually have to melt down the component that stores the data. the responsible retirement of the overall components is also part of the supply chain mismanagement.

now, there are a number of medications that we can put into place from the platforms, to the preferred suppliers, preferred logistics and independent certification is recognized by countries around the world. those certifications are part of the assurances in the way we manage the risk. whether that is the international standard organization, iso, including a study they did about six weeks ago, including the common criteria that is recognized by many countries around the world. okay, so i would like to kind of close with two things. we need to recognize that this is a global ict ecosystem.

all of our companies are betting infrastructure. it promises ddd and efficiency. although they may be leaders, does not mean that the products are not without items or things that we need to be considering were worried about. therefore, we need to have a consumer report like rating system of these products and services and consider that, just because a versus b doesn't mean it will work with c. we are integrating them into our system and we are so enamored

with what the products will bring as far as agility and efficiency, we need to start reading them as to whether or not they are performing the way that we need them to. and whether or not the vulnerabilities are accessible. some policy and market procedures need to be reviewed. most of our countries and government, because they are responsible for the essential services and system safety, are trying to put control back into the system. many of our countries are talking about regulation, a lot of regulation. in many ways, if we really want to have adoption of a policy and we are going to encourage that a adoption of a policy and we want to have that behavior change, we need to talk about behavior changes and providing incentives and i am going to give you an example. we have a policy in the united states that talks about that we want to have energy diversity and an efficiency and limit the

emissions of city environment. in that policy has been complemented by a whole series of subsidies and gore-tex release and credits, however you want to think about it, to encourage that policy. we, as citizens, get paid, we get a tax credit or a write off, driving fuel-efficient or electric car. you get to go on the hov range with a fuel-efficient car. as citizens, we also get a tax write off that we buy fuel efficient heating and cooling systems. others are probably in the room today, they also get tax write offs for buying and installing energy-efficient fuel-efficient and lower emissions, heating and

cooling systems, windows, etc., and their businesses. and adopting more green policies on diversified energy policy. third, for those differences and to try to encourage innovation, again, there is a 17% tax credit for research and development for new technologies and the energy in this field. if we are going to get serious about cybersecurity, our policy and the market leaders need to follow suit and we need to start talking about regulation. this requires partnership. we need to build this society together. it requires a team and it requires us to meet regularly and understand what incentivizes both parties, one is the bottom-line bottom line profit, innovation, and competitiveness in a globalized market. the other is about national

sovereignty, national security, and overall economic growth. it is time to bridge that conversation, and i think actually starting this conversation is going to take time, money, and we need to reduce our exposure. thank you. [applause] >> melissa ,-com,-com ma thank you so much. to all of our speakers, thank you so much. i feel like we should all get some college credit for just attending this great class. so just a couple of notes as to how this applies to the communications supply-chain but i will add, just from my experience at the fcc come a really pleasing to what melissa hathaway was talking about. the sec is not an intelligence

agency. as a matter fact, while i was there, there wasn't anything like that at all. but obviously, with the communications infrastructure, we have to be concerned that it cuts across all the other critical infrastructures, like energy and some others. consequently, what are those threats? well, if you are concerned about software and hardware that is in our infrastructure, there is a possibility for a lack of security, information leaking out, so to speak, doctor robert hutchinson also talks about it and he tries to raise major concerns about the integrity of our databases. when you think about all the old movies where you say, well, i'm sorry, sir.

there is an outright act of war where you have to have a kill switch for the communications network. those are things you can be concerned about. how do you protect against those? well, we are talking about private infrastructure. there is a role for government but you also have to be concerned about diminishing the capabilities of private industry to protect itself, which already has an incentive to do it. as melissa said, you have to look at the proper role for government and incentivizing private industry. what we are talking about right there is the very facts of the basis of security costs and money. someone is paying for it. can government help in creating a new market for? can they create incentives for that and security for the system? one of the things -- some of the

different ideas that were kicked around while i was working on this, some people thought that perhaps the government should review the procurement of major carriers. well, that may be a step too far. that may be slowing down and impeding the system, the private companies from doing it. another question is the buying power. and i think that brett lambert referred to this. if the government insists on certain things, perhaps that is a way to encourage it. but as you mentioned, perhaps that is diminishing now as we have moved over the past decade towards more commercial technology. perhaps another one, and this is one of the ones that we put together a paper on, perhaps a tiered system of supply-chain risk management, understanding that not every piece of

equipment can be regulated by the government or necessarily taken by industries, but maybe you need to concentrate on those areas that are most important. for instance, in our communication networks, there is a piece of equipment called a transfer point. like a lot of equipment right now, there is a way back to the home company. it could be someplace else, too. yet, you have taken out the network if you have taken out a stp. it almost didn't have the same type of protection that you were for the avionics of an f-15. as you move out there, maybe you can use supply-chain standards that would allow this. it is pretty much, maybe just best practices or the other

thing is we need to understand everything that we do cost money. with that kind of overview, i would like to move to questions to our panel and i will open it up for your questions in just a little while. in this regard, since there was the discussion, i would like to start with the question of trusted suppliers and what role of trusted suppliers may be able to make a mess. maybe each one of them hinted at this. let me open it up to you. what do you mean by trusted supplier? what are the implications and ramifications of a policy that we should continue or should pursue? >> you know, there are rules for all three, i think, of what you

described in ways you can't attack the problem. i think you that issue we find ourselves, particularly in government, as we find bumper sticker solutions to complex problems, there is a tendency to gravitate towards a solution that is eagerly understood not just by the customer, but by the legislation and the legislators would have to pass it in the contract officers would have to impose it. that leads you to build around things because that is the easy solution. you can do that, and in some cases, that is a necessary approach, i think particularly when there aren't unique commercial opportunities are things you can do with industry standards. like you said, a more tiered system. there are very good solutions for some things, but it's a very narrow, very specific set of challenges for very unique product that the government faces. it's a very expensive solution.

you could pursue that, you could pursue it for a wider range of things. you would find yourself several billions of dollars later in several years down the road being able to manufacture a perfect 886 chip. one of the difficulties is you lose the access of innovation and commercial technology. so there has to be a balance. the motivations of the other side -- and when i say other side -- who is on the supply-chain and who is causing the problems. the vast majority, not the best results, but the vast majority is really criminal behavior in many cases in the supply-chain. these are people doing this for profit. that is what i would call the yellow tape issue. that is where you need aggressive prosecution and you need to differentiate suppliers to behave in this manner, make sure that they don't supply to

the u.s. government or contractors, but that is a yellow tape issue. the more complex issues are those who are trying to attempt to enter the supply-chain for nefarious purposes. that is part of the main challenges that we face. and we will come up with different solutions for each unique problem. it will not be one-size-fits-all, no matter how much we would like it to be. you can't take an example of a successful program in the department of defense if we are managing the supply-chain and decide that we are going to apply that single solution everything that the department of defense buys. we simply would not be able to buy anything if that were the case. >> it's not just trust in

suppliers were objects of things, but also those who support those things and those that may install them and maintain them as well. >> when i think about it, i think we are talking about multiple definitions of a trusted supplier. we got it from a business point of view. many of their suppliers have to go through a set of requirements that meet whatever those security and integrity of the overall company, whether it is background investigation,

undecideds and the ones in the united states sometimes it is difficult to become a supplier to an anchor tenant, because they don't want to have their brand integrity challenged or their product challenge. there are trusted suppliers to the suppliers and that is another set of vetting and those two processes are very important. >> food analogies are some of my most favorite these days when

you are eating catfish, you don't know if it came from the mississippi delta or vietnam. we have regulations and to extend your analogy,, is there a role for regulation in cyberspace? were the proper roles and as melissa mentioned, policy leaders. >> as i said at the opening remarks, we don't actually set or make policies. whether or not there is a role for regulation or other methodologies is really up to others in the government to decide. with that said, having to have some set of standards, however that is, with folks who know

what that is, it is the subject that is really up for a lot of discussion and debate right now. >> was a? >> you see, i did not realize that catfish could swim. [laughter] i think it is a more appropriate leader and trying to come up with our own.

[inaudible] >> what's a question? >> perhaps it requires somebody to expose what is going on in order for all of the different behavior changes to happen. so we are looking for the upton sinclair of cybersecurity. >> it is a jungle, it truly is. one of the things that has come up during the discussion here is the counterfeit chips. would he think the mechanisms are for counter place until

counterfeit for reaching critical infrastructure? >> this is not my pretty. we have an entire operation. you know, i think that in the pentagon, when you want to get a lot of people at a meeting, use the word transformation. [laughter] five years ago, you use the word cyber, and now you use the word supply chain. it is amazing how many people are interested in at this day and age. there are a whole group of individuals at dod looking specifically at that question. i tend to look at it more from the industrial base and how the decisions that we arrive at and how we interact with the industrial base. it is a serious challenge and i can tell you that the folks are actively looking at it to try to come up with a not one-size-fits-all solutions and try to come up with something

that is not just appropriate for today, but is scalable in five to 10 years. i would be happy to put people in touch with the task force and leadership if you're interested in knowing more. there is a lot of aggressive war going on right now. >> was a? >> you have anything to say about that one? >> no, i do not. >> okay so we talked about authorities and some of the things -- the various levers that we might have out there. we talked about having no great market and those types of things. are there things that the government could do -- is there a way to procurement we could influence things, and you

mentioned, brett lambert, ways to get people to meetings by using buzzwords. if you want people to run, all you have to do is talk about industrial policy. but is there a place in industrial policy. a great deal of our, i guess you would say, mechanisms that go with the system, someplace other than the united states, and even those companies the would typically call american, they have been spilt all over the world, as melissa said. is there a place in industrial policy and is there a place for regulation? >> well, i think the market seems to work pretty well. melissa said the market does tend to be self-correcting we can always sell correct without some incentives. and i think that is what we are trying to apply.

industrial policy has the connotation of imposing onerous standards and we are trying to do the opposite. we are trying to come up with a reasonable approach where we work with the industrial base and the supply-chain. figuring out what levers we have in the government, whether they be on the incentive died. we have these programs that fall into my jurisdiction, and a host of other ones, but we are really looking at incentives, not disincentives. my personal opinion is that strict regulations and when you talk about technologies, they never really were. not over the long period they do

end up with a perfect chip in this context. it is most appropriate when the government can work with international standards, organizations, our products that we need. >> it is almost like throwing a stone in the pond and it is a ripple effect.

it never occurred to anybody that it would have such a ripple effect around the world where so many countries would begin talking about the would be only manufacturing indigenous suppliers, and not just for national security systems, but telecommunications systems and the like. it would actually hurt the competitiveness of the major ict companies, many of which are in the united states. it's going to be indigenous, so you only have the best ideas of their country. the internet actually evolved.

somebody came up with the idea of this and it was modified in japan and then finland and modified around the world. somebody developed another product and it was modified and countries participated all over in this internet revolution. as we look at the mix to get to what our policy is, or wants to be, and we really need to think about the unintended consequences of whatever decisions that the united states are with, because many are in the discussion of this particular area. >> no matter what levers are decided to be used, it's always important to sit back and reflect a bit on the context of the conversation, cyberspace, it is significant. the threat we face is real,

growing, and evolving. evolving in the sense that it started out in the way up as of as the marsh and property theft, and evolution disruption. keeping others from being able to access services that they might want to. our real concern and fear as a nation, that it could involve possible destruction. so whatever levers are used, it's in the context of knowing that with our dependency is a very important area for us to work and it's not a hypothetical. it is real and growing and evolving and we are going to have to together address this. >> listening to some of those levers on the regulatory and market side, are there authorities right now for doing that kind of regulation? do they exist right now, or is

this something that would take legislation? >> well, we have many regulators in the united states of which have authorities that could address parts of these problems. you know, we have a federal education commission and the authorities there that we use to advise the commission is on. to help bring about a standard of care within the telecommunications market. and if they were so bold, they could extend it to the internet service providers. standards of care within the electric utility sector, and i stress that their are two full regulators there and not many people appreciate that there is

ensuring of states to help set the price point so that we get electricity that we can afford. and the federal regulators and others in the other set of standards that must be met. old regulatory processes -- it's quite profound here in the united states. the authorities are not necessarily strong, especially when it comes to the utility sector. the nuclear sector is also regulated. they do have a lot of cybersecurity. we can do what they can do and how it has been hurting the industry. all public companies are also regulated through the securities and exchange commission. as we all know, cybersecurity is now a hot topic some proposed

dialogue -- the financial services sector is also regulated and so is the credit card sector through compliance. there are regulators that could need to learn more about the threat of what is at stake and work with the industry's ability to reduce vulnerabilities. >> at this point, i would like to open it up to the audience here. if you would state your name, organization if you would like,

and your position. >> mr. brett lambert, one of the standard constructs, research development test and valuation -- i would like to know whether the folks testing the different products in the supply-chain to see a bear cybersecure and to evaluate or measure exactly how much. and what's we could take -- is that something that can be could be extended to come up with the testing models in the testing infrastructure and support, it would give us better insight, understanding into the vulnerabilities and resilience of the various systems? thank you. >> again, the rde site works

with the other side. and in fact, they already do this. it goes back to what i said earlier. that was very effective and can be a very effective mitigation tool. one of the things we are not trying to start from scratch, we are trying to look throughout the department. how we can better leverage this by doing additional testing and

it solves a large part of it, but even there you still had the more fundamental and much more serious aspects of the introducing elements. very difficult to detect some of the criteria that we currently use a map yes? >> adding on to what jim said, agreeing with the role of testing and evaluation, we have to put that into context that cyberspace is continually changing.

the devices themselves are often morphing and changing substantially. what hast to be factored into that as well? >> i have a twofold question. one is, obviously there is a lot about counterfeit parts and so forth. how many cases and how severe the cases have we actually had to date where there was a chip that was calling home is some nefarious actor, that was not simply a matter of it being counterfeit, but actually representing that threat that is actively spying were sitting there is a potential kill switch.

the second question, talking about incentives, what would those incentives be? of how you actually make it appealing for people to address these problems using the stick of regulation. >> thank you. >> i think there have been some public comments on hearings of the first question. but without knowing specifically , i will take would take a pass on it. but there are certainly, we have seen instances that i couldn't give numbers or specifics on, unless you want to? [laughter] >> actually come you're better to ask me to look at the

individual tax credit of for this number or the that number of dollars for encouraging every household to to get down to a point solution, which i wouldn't recommend, you can have an antivirus software is a write off. but if you keep that up to date and whatever your subscription rate is, i think personally, bringing it up to an isp is the smarter thing to do. it has to do with downstream of the entity or endpoint.

again, the internet service provider is providing more of a managed security service to all of the infrastructures and have that be some kind of a tax write off. i would extend the 17% credit to the innovation of the products, the next-generation products that have a development life cycle that has all of the assurances in place from the beginning you are building more products and services from start to finish. you will get a better ecosystem somewhere down the line. whether it's three or five years from now, therefore, you are going to reduce your exposure and long-term by the policy incentives. if you want to take on the

industry environment is essential to the growth and health of the united states of america, like we have done or our industrial base. we subsidize parts of our industrial base. we ensure that we are going to buy x amount from our industrial base. we have others in order to make sure that we have the products and services coming from an industry that is actually driving the gdp growth and is one of our largest export industries in the world that might be important for us to consider those other leaders of incentives to ensure the health and well-being of that sector that is driving the overall growth and well-being of that country. >> along those lines, you are exactly right, and two years ago, we set up something called

[inaudible] , it consisted of the 17 different departments at me, we have teams that have informed and we actually funded programs across government programs, and also more importantly, frankly, very vital programs to the future of national economic well-being. one of the teams, one of the teams that are currently set up, one is on energy and the others on telecommunication, the telecommunications team is probably one of the most active. we are also pursuing programs to create centers of excellence are working with companies in the private sector as well as universities and the government doing a one to one -- at minimum, a one-to-one match.

it is vital to u.s. economic well-being as well. >> i would like to follow up on the food chain. was it someone gets sick from eating a sandwich and they don't get the proper care, when a company that gathers data about me is penetrated and my identity is compromised, i have to spend money and time on my own legal

recourse against company providing that data. what is your position on providing a legal avenue to raise the bar as an incentive that security is not a cost, it's a protection from legal liability. that would be on the stick side of interstate incentive. >> that exists in the federal ftc, the federal trade commission. and they are, actually, now, using their authority to help protect your identity and that you are prosecuting of the companies that don't protect your identity and how the stated policy and our e-commerce. all things that go along with

e-commerce. if your company -- they are protecting these things and most of these fall under the [inaudible] they have to protect it. we have recently prosecuted wyndham hotels for the breach that they had four losing credit cards and identity and google just settled their lawsuits with the ftc. so the ftc is starting to use their authorities to protect e-commerce and that is part of the data and that lever exists, and i think you'll start to see industries changing the way that they are going about handling our data in the future. >> do think there is a place for a private right of action?

or is that enough? >> there are class action suits. the most recent breach, i think, eat harmony, there is a class action suit for handling of the data. just one month ago. you are seeing the courts weighing in from both the citizens response and holding citizens responsible. >> hello, i cochaired the defense security task force with general williams and schlesinger i have been in the chief of naval operations on abilities on naval security. i would like to talk about the states on electricity and regulation -- the states regulate almost exclusively for

race and not for reliability at all. they can take effect after a process, it takes four to six years. in light of the threat, which is something else i wanted to talk about, we have no effective regulatory system. i am particularly concerned about -- as i am concerned for cyber. i would like to call into question the parish ability of cybersolutions that a lot of the discussions today, which i completely agree with all of it, focused on the cybersolutions to the cyberproblem that i would like to point out that because of the rate of the threat, particularly with the bad actors, you might think about dumb solutions and i wanted to know what your thoughts on this, and, you know, the ability to take things completely down and

talk about the non-cybersolution to the problem. diversity of suppliers and that kind of thing. >> you are right. i am not familiar with the energy side, but certainly there has to be a diversity of responses. this is a classic asymmetric threat, only in this case, we are spending billions of dollars against a half a dozen guys in the garage wearing flip-flops with a bunch of rebels. it is a very difficult threat and it is always changing how to get your arms around it, which is very difficult. they have to be dynamic. and i think that there are some capabilities that lend themselves to disposability assistance. that is not something the department typically does. when we buy something, we would like to procure it and then keep it for 30 years.

and that really is not a model for the future. unless you are on water as a sailing ship. even there, what you put on that ship is going to have to change. i think there is room, and there is a dialogue on back, everything from the resiliency to duplication, particularly in the i.t. world, i would not dismiss the fact that since we are -- we do cheat on hov to be more detailed, one aspect of this is not to try to control the space but to get lost in it. and that is a solution that is quite adequate for many of our systems. if components are so ubiquitous, then why would you want to point out that you had to have a specialized one? i think there is a range of technical solutions that need to be pursued and we are looking at the entire spectrum to what you

have started saying about physical and virtual cyberspace, solutions being not just for one or the other, the convergence that i talked about at the beginning is not just applying in the space that we call cyberspace alone by converting the physical and virtual worlds simultaneously. therefore, solutions understandably often have components in both the physical and virtual world, based on experience that we have seen. and in part, when you have a virtual world, it is, in fact, it is virtual. anything you change in that space space can actually be re-change were unchanged for done. the permanency of any changes that you make is short-lived. because the space can be reworked and created and

adjusted. looking at the physical and virtual dimensions of the problem. to ed sullivan, independent consultant. i haven't heard anybody specifically refer to computing today. is that considered to be a solved problem or what needs to be put in place for that? >> i look at both sides now. you know, you can have an entire session on the opportunities and the vulnerabilities and that there are a lot of smart people and they are mostly in your domain. >> i would say that cloud computing, not necessarily to solve the problem and that everyone knows exactly what to do with it, and, therefore, if i

take your question one more step further, what about security and cloud computing, a good opportunity to make what is an important observation. we looked at security as an add-on to what it is we are doing. such that we have the cost to do whatever we are doing in information technology and then there is this added cost to do security. but it is a way to stage this right now where we can, together, the industry in all, we can architect a solution for which the security is already in it. it started happening back in 1969 with our first message. we didn't have the same context

of the nations of individuals of our time. now, when we work on these new technologies, we certainly can, therefore, if we can, it may not be unachievable for us to actually reduce the overall costs, because we don't have to have added cost for securities that will actually be resigning effectively so that we can actually decrease our overall costs with greater security. that is something that we believe to be achievable if we are working to integrate what is our requirement that kind of performance that we want. >> i know that some of our panelists have to -- after this.

join me in thanking our panel for this great event. [applause] >> duntemann, it has been great hosting this with the national security partners. any comments? >> we hope everybody will come back. and now for closing comments, i would like to introduce our seo, michael swetnam. >> i would like to add my congratulations on a good event the staff, we are putting on the warmest thanks, hopefully in the long one we can turn it into something that is a benefit to you, because that is our goal. the most gratifying part of this is the only part of my life where i get to have the last word. [laughter] >> at least for a few minutes. >> i would like to lay out to

thoughts imparted today, very quickly, it occurred to me as i listen to the presentations today. the first i would call everything. complex problems, dealing with problems that have such complexity to them that they don't win themselves easy solutions just as i mentioned earlier. this is one of the most complex problems brought on by one of the best technologies. clearly, there is no single answer. however, when you hear comments about this or that that doesn't address the problem, the answer is never know. the answer is yes. we need that in this and everything else we can think of. >> coming up next, representative eric cantor faces

his challenger, wayne powell in a debate. this debate, focusing on economic issues is hosted by the virginia chamber of commerce. live coverage now on c-span2. >> ladies and gentlemen, i am very well, i am the president and ceo of the virginia state chamber of commerce. i would like to welcome you tonight to this debate. i would like to thank you very much for being here and participating. the virginia state chamber of commerce is pleased to host this debate tonight. we want to extend our appreciation to the candidates that have presented ideas that we are very interested in hearing and, of course, in our country. i would like to thank our hosts. one of virginia's great corporations headquartered here

in the commonwealth of virginia. i also want to thank the other sponsors of our debate this evening. anthem blue cross blue shield, dominion resources, and others. i also want to express my appreciation to the many who are in the seventh congressional district who have agreed to cohost this with us. we would like to think the greater richmond chamber of commerce, the fredericksburg chamber, and the louisiana louisa county chamber commerce. we think all of them for partnering with us. the state chamber represents about 15,000 businesses directly and our local chambers represent about 50,000 businesses across the commonwealth of virginia. we care about those issues that impact virginia's competitiveness, and more in one of those issues not only come

from richmond, our capital, but they also come from washington dc. so this is an important topic for us this evening and the businesses and citizens of the commonwealth of virginia. i also want to thank some of our local delegates and state senators for being here today. we appreciate ken peterson as well. the state chamber is strong because we have strong leaders. we are very fortunate that in 2012 our chairman is here this evening to bringing his greetings and encouragement and he is the champion of free enterprise. private sector, currently, for the last several years, he has been serving as the vice president of corporate affairs, another virginia based corporation. and he has been serving this

year and he has been championing the idea of citizen participation in the idea of free enterprise. i would like you to join me in welcoming him for serving as chair on the state chamber. [applause] >> good evening. in my role as chairman of the state chamber, i welcome all of you to this important debate tonight. debates are a vital part of our electoral process. we get the chance to hear from the candidates, no filters, no spin, well, maybe a little bit at times, we get to hear where each candidate stands on the issues for the day. and then consider those positions when they cast their ballots. debates like this one help us determine who is aligned with what means most to us.

part of being a voice means ensuring that our members, large and small, have access to the candidates for public office. choosing a representation is one of the treasured rights as american citizens, one that is a part of our responsibility to the republic that we exercise voluntarily. in some countries, it is mandatory that each citizen casts his or her ballot. for example, this weekend, there will be an election in brazil and it is mandatory that every citizen vote. but make no mistake, while it isn't mandatory here in the united states, it is important. harry truman once said it is not the hand that signed the law that holds the destiny of america. it is the hand that cast the ballot. not only can one vote make a difference, it will make you feel good about participating in our democracy.

election day is 36 short days away, and if you want to vote on november 6, you have to be registered. the deadline in virginia is on october 15, so you still have time to register if you are not registered at this point. through the prosperity project, the virginia project aims to ensure that every employer and employee has the opportunity to hear where the candidate stands on the issues that impact business. that is why we would be posting the candidates answers to these questions tonight under the prosperity project, along with answers from other candidates, including video responses from governor alan and kane. from the chamber's perspective, voting is something you can do to help grow your business. like making an investment or marketing your products or services. there are so many issues at stake in this election for business leaders, entrepreneurs, and employees, i hope he will help ensure that the community

voices heard on these issues and many more by making sure that you are scheduled on election day and you stop at your local polling place. bring your families, friends, neighbors, and colleagues come along with you and remind them to register in the coming days and you will and can make a difference. my message is simple. get informed. get registered. get out the vote. get informed tonight by listening to the candidates on this stage. if you aren't already come you can get registered tomorrow. and if you care about our country under business, you should get out and vote on november 6. also, if for some reason you will be at home on november 6, please vote absentee. the absentee balloting process is now open. i would now like to introduce tonight's moderator. doctor bob holdsworth is the founder and president of virginia tomorrow, a company

that examines emerging trends in politics, society, and business. his observations on national politics have appeared in "the wall street journal", "washington post", "new york times", most of the u.s. broadcasting stations, itn and bbc and fuji in japan. he has served on a number of commissions and advisory boards and was the costaff director of the commission on the future of virginia's urban area. on the charter commission for the city of richmond. he also was a founding director of the center for public policy and the wilder school of government and public affairs of the virginia commonwealth university. i think each of you for coming tonight, and i which each of the candidates a good debate. now, i will turn to our moderator. [applause]

>> thank you very much, what a great audience we have tonight, we are going to have a wonderful debate. let me begin with a few reminders for everyone. first, we are fortunate enough to have c-span covering this event tonight and we want to let everyone know about that. [applause] secondly, both candidates have asked everyone in their room to turn their cell phones off. not buzzing or beeping were bringing in any way, but please have them all or it and we would be very happy about that. third, after each question, if you could please hold your applause until the end of the debate, we want to make sure we can move in an expeditious way, and we are just going to take time from the debate if we have to wait for applause at the end of every question, no matter how good every answer might be. a little bit about the actual format of the debate. we begin and end with closing statements by each candidate and

those, the order which has been determined. after the opening statements, i will ask a set of questions to each candidate. the opening question will go to a candidate who has two minutes to answer, there will be a two-minute response, and that will be followed up by a one minute rebuttal either candidate to whom the question was originally directed. in the middle of the debate, after those three questions, the candidate will have the opportunity to ask each other one question as well in the same timing, which will be allocated there. we will then conclude with a set of questions that i will ask once more as the moderator. i should note that the questions i will be asked and that i am asking have been generated, particularly in terms of themes by the business community, and tweak them a little bit for the purpose of the debate, but they come from the business community. so please now join me and we are

going to introduce both candidates, congressman eric cantor. [applause] [applause] >> thank you. now, the challenger, mr. powell. >> we begin with an opening statement by congressman cantor. >> i want to thank you and all the hosts for tonight's event. we very much appreciated. there is no doubt that we are in troubled times in america and here in virginia.

the employment rate, the percentage of americans with a job is at its lowest level in 30 years. the number of americans in poverty and on food stamps is that the highest it has ever been. families here in the seventh district and elsewhere are under a lot of stress, and when i think about what that means, i think about the single mom, the working mom who may be in this county a couple miles from here, and i ask myself, what is she thinking right now. what is she going to think tonight when she tucks her children into bed. i can tell you what she's thinking. she is thinking that she has a job right now and she is one of the lucky ones, but she's having difficulty making it through the month, and she may want to go to community college or to college to expand her skills and get another job. but the prospects are not there. and i think that her challenge represents a challenge for all of us. tonight, you are going to hear

from my opponent and from me, two very different visions of how he would address that challenge that working mom is facing, and frankly, to visions that will take us to two very different futures in america. one is higher taxes, more regulation, less jobs, and more dependency. the other path to lower taxes, less regulation, more jobs, more success, and more opportunity. and i support cutting taxes for small business men and women to help them create and retain more jobs, whereas my opponent supports raising taxes on small businesses which will mean fewer jobs. i support a moratorium on red tape regulation, except for the safety and health of the public until the unemployment levels come down.

my opponent has said that he supports more regulations that will mean less growth and less jobs. i oppose obamacare and i want to repeal it and replace it with patient centered health care reform. my opponent, he supports obamacare and even wants to expand on it. these are some of the differences that i think you'll hear tonight, i think the chamber again for having us. i look forward to a very robust debate on the issues facing the district this evening. >> mr. powell. >> my name is wayne powell. and i am really surprised to be here. i am a husband and a father and a soldier. a small businessman and, hold the applause, i am a lawyer. but i'm mostly proud to be an

american in to be a virginian. you're going to hear things today about me and i don't want to spoil the surprise, but eric may see things about me. he may say that i am an obama puppet, but i can tell you that i support my party more firmly than he does and i also believe that insurance companies should not deny people health coverage because they had pre-existing conditions. i also think that as a first step to get our fiscal house in order, we need to cut spending. however, there are certain financial commitments that are important for this country, and i think that that does not make you someone who believes were is a big spender, if you may call me that. i also think that we need to cut the increases in medicare costs. none of which would impact the benefits themselves, so he may say that i am in favor of

cutting that money, but by the way, he voted for the same cut, except he wants to privatize medicare. i am seeking to go to a place in washington, where everyone plays the blame game -- where everyone thinks that the problems are caused by the democrats and republicans. as you already know. the sooner that we address this, this serious physical problem in this country, the sooner we can get the solutions and not the gobbledygook. as you already know, i am not a professional politician. you can tell by my haircut. however, i take a second seat to no one in my commitment to the

right things for this country. i served 30 years in the united states army on active duty and as an active reservist. and i did it because it was the right thing, but i also think that was the right experience. as you may or may not know, 80% never served in the military. those people who never served don't know what it's like to send sons and daughters to the war, and by the way, are veterans, i think, our veterans deserve much more to get their benefits than corporations that send our jobs across the water deserve to get special tax incentives for our tax code. thank you for inviting me, and thank you for being here. >> congressman karen. one of the biggest issues facing the country today is the impending fiscal cliff. how do you propose navigating

the debate over cutting expenditures and raising revenue to create greater investments, new jobs, and less complicated taxes? >> let me say that the tax increase is the last thing that our economy needs right now. so what i would do is support the extension of the existing tax rates per year and allow us to go ahead and reform the tax code. there is agreement on both sides of the aisle that we need to reform the tax code and bring rates down. and to make sure that the tax code is a blur and fair for all, and closes national interest loopholes. i also think that the fiscal cliff has a lot to do with spending and the increased borrowing that the company says any. and i had the opportunity with vice president biden, we came up with $2 trillion in savings. they include reforming agricultural programs and

fraudulent payments in our systems, trying to modernize the federal pension system. it is these kinds of things we can come together on and hopefully, when we get this election behind us, we agree to sit down and resolve them. because the last two years, it has been difficult to get both sides to come and say, hey, we want to solve these problems. >> mr. powell to i have turned and heard this many times. fiscal cliff. last year, then we had the committee meet after the debt ceiling talk, and then we had the congress that decided that we will agree on the sequester funds, which we are facing and that is the fiscal cliff. it is about a congress led by this man to my left and decided that they would rather kick the can down the road to continue

the cuts for another year so that we have to wait another year to do what we have to do, which is make painful cuts. those cuts should not be done with an ax. when i hear fiscal cliff, i hear a person who is dysfunctional and one who will not sit down with the opposing party, and that's what we need to do. first of all, we need to not continue all of the tax cuts and i agree with tim kane, the $500,000 should be the limit and as mr. kantor knows, and he voted for this, voting for tax cuts in the middle of two wars is irresponsible. everybody knows it, all the people in this room know it. two unfunded wars, unfunded tax cuts, this is insanity -- it's economic insanity. we have to reform the taxes. however, i have heard that before from others in this party and my party.

it is time to get action, which means you look at the tax codes, you keep some of the taxes for the people who earn $500,000 or less, especially middle-class people, but the people, let them pay their fair share and let's get our spending and taxes in order. you have to have balance. we do not have done balance and everybody knows it. >> congressman cannon. the fiscal cliff with these tax rates going way, we have the sequester. the reason why the sequester is in place is because, frankly, the president would not agree to the kinds of spending cuts that mr. powell says he is for. the president would not go along with spending cuts, insisting that we put in place the sequester. then, after the failure of the super committee, congress had a duty and we had to put forward a bill in may to substitute the cuts to make sure that the cuts

don't impact the lives of virginians or national security. 19% of the jobs come from the defense industry. something important that we avoid again, it is time for all of us to sit down and talk. we have continued to put forward solutions that don't aggravate that economy. and yes, we want to keep taxes low. we don't want to raise taxes. each party is going to have to compromise in order to avoid taking the country over this cliff. what comprises do you believe your own party will have to make to walk the country back from the clip? >> first and foremost, i have said that in my opening, we have to get control over spending. we also have to keep certain financial commitments and that would be social security, medicare and medicaid.

now, the defense budget is bloated by anybody's standards. we have a defense budget bigger than 25 other countries and it doesn't matter. they are called terrorists, and that is the people that i was pursuing, to say that we need to keep the defense budget of the present level is just ludicrous. that doesn't mean we need lose 160 jobs -- or however many that he talks about. but first supported it, the sequester, and then he didn't. it is mr. obama's problem. it is the congress' problem. there are a lot of things that we need to address, we need to send things and make sure that

the defense department, if they can do it, we need to look at why they should be able to support themselves. i think it can. i was part of the department for 30 years. they don't need help from other contractors. these are bloated contracts that need to be modified and people who continue through the campaign and that is one of the reasons that we have this running problem. we will address a lot of the issues near this fiscal cliff during the new year. >> congressman cannon? >> you heard him say he is not for the sequester. we have the smallest ground force since 1940. the smallest since 1941. and we will have the smallest tactical fighter force in the

country. that is what it has all been about. how do we manage the debt and deficit and start paying more of our tax dollars to the burden that is on us and will be on our children? mr. powell has already suggested he wants to raise taxes. we taxes on small-business people. and i would ask going back to the assumption right now, we have a terrible economy. we want to help people. how do you help that family we met you help them by creating more jobs and opportunities. you do that by allowing small-business people to do their thing and get big government out. that is why you support a moratorium and a new regulation so that you can allow for small-business people, and entrepreneurs to start to

investigate. we need to have a working agenda that is progrowth and is not burdening business. you have heard again that mr. powell said that he is not voting with his party all the time and i've i would ask him whether he thinks that obamacare is a regulation that he supports. he has certainly said it enough times over the last year. that, too, is harming businesses do not mr. powell? >> perhaps if you have been part of the u.s. army, you would be looking at why was it sequester in the first place. by the way, you always inject about small businesses. i'm not against all businesses. i am a small businessman. i don't want small businesses to pay taxes.

it's your responsibility, the congress -- you have to do these things and you have not. >> let's talk about taxes again. the degree of urgency to discussion of business tax breaks and rates such as the taxes on investment income. one approach broadly endorsed by mitt romney calls for the lowering of individual rates across the board and the elimination and reduction of existing tax exemptions. on the other hand, some democrats have called for continuing the bush tax come content

bush tax cuts. what a thing can actually grow the economy and reduce the deficit? >> what is good for the country, mr. powell, is that we need to -- we need to create jobs. that is how we get going again and that is how we get more tax revenues to the federal government to help manage down that debt. so we don't want to raise taxes, but we actually want to reform taxes. we want comprehensive reform and we want a corporate tax rate that is the least competitive in the industrialized world. they are looking to locate or relocate -- it is not always attractive. we need to make sure that we change that peculiarity in tax law which forces american-based,

multinationals that mr. powell does not like, i think that we need to make sure they don't pay taxes twice if they are operating abroad. and he would suggest that perhaps that is giving them a tax break. what is happening is that we don't have a territorial system. we have a system which ties with one hand behind the back of the multi- nationals. they will create more jobs here at home. similarly, we have to go about making sure tax reform applies to individuals. because we know the overwhelming number of businesses file, the file as individuals and they pay their taxes at the individual rate. we want to make sure that those rates come down as well, too. in order to make sure that they come down, we have to do some reform and how we are going to close the loopholes, and elbow their way through the tax code,

but we should all do that for the problem is the president and his party have said that tax reform first starts with tax increases. there is a disagreement on that. mr. powell is right. that disagreement has held things up. how do you create more jobs, you help small-business people by giving them a tax break. ..

say business is the only thing that creates jobs, people are sitting out there waiting for somebody to call and say i want to work for you. how about tax incentives and cuts for regular people that are trying to put bread on their plates. howhow about the student i met who is working three jobs and have a $50,000 loan and the paul ryan budget cuts the grant and you vote against cutting the interest for the loans. where is the interest and the wanting to take care of your own par frags bruce string seen. our own is small business. i'm a small business man. yes, my employees and the people at work and their husband and wives these people are suffer. i see them all the time. what's happening in the country since 1980 is that from 1% of the population that controls 7%

of the wealth, we have 1% of the population and this is not class warfare. this is fact controls 24 to 25 percent of the wealthy. there's something wrong with it. the comifses see it. we have need to have tax reform and we don't have raise taxes we have to distribute it fairly. the people who may the most have to pay their fair share. that's the way look at it. >> congressman cantor. one minute. cantor: that's a lot of talk about fairness. so many people are out of work. nearly 220 million americans are unemployed. let's go about giving them the opportunity to go back to work and begin on the careers again. the notion of fairness that the government of washington needs to decide who gets washington, i don't think that's what most americans believe. we all thought have a fair shot of earning our success.

we have ought to have that opportunity. and there are too many people at the social economic 20% of the bottom who don't have that fair shot of going to earned success. we need to do a lot of things to reform the public school system to give the individuals too they can get up on the later of success. it's about income mobility. it's not as mr. powell income redistribution that somehow we in washington have to decide who gets with a. [applause] >> moderator: we have a rule about applause. congressman cantor, your question for many mr. powell. glait glaipt we are facing some of the worst economic times of our lifetimes. people are out of work and they're hurting. and we're trying to deal with the deficit and the trillions of dollars and looking for ways to

cut it. however, you say on your website that if you are elected on your first someday day in congress you will introduce legislation to make campaigns publicly funding. your first act in congress would be to increase the deficit and take money from other important programs or to raise taxes to pay for political campaigns. don't we have more pressing issues than to create a government-welfare program for politicians? >> moderator: mr. powell? powell: that's a great question. [laughter] actually, i don't think the public financing of elections is a great idea. let me tell you something based on the corporate welfare you're receiving in order to run your campaigns it's got to be better than that. it comes from the people and not from the corporations. [laughter] [applause] [applause] you are either number one, two, or three in receiving the most money from the pharmaceutical

industry, the investment industry, the real estate industry. thank god for the first amendment. it's almost obscene the millions of dollars you earn. does anybody in the room think these corporations give mr. cantor a million dollars or more just because he's a nice guy and it looks like he is nice guy, by the way. i don't think they do that. they want him to vote the way they want to vote. the reason i seem passionate is because i am. it's more of indig assistance. it's being indig indignant the people i have talked to and seen. our system, especially since citizens united on scene, it's the most directive opinion the political system has issued with regard to the political system. as an alternative to the on scene process we have where corporations pay for votes and he gets to vote against the own people because somebody from investment firm on wall street says we want to keep the stegall out and divide the commercial

banks and investment banks. look what happened in 2008. you have someone that supports the very pair para sides that cause the melt down. it's designed to have people who come to washington to find out what they need to find out for the hedge funds folks in d.c. or new york, exactly what they need. he take it is out. even chuck grassley from the own party says he's carrying a water for wall street. that has to stop. [applause] >> moderator: congressman cantor? cantor: you know, first of all, i would ask the question went to the priority. again, we have so many pressing issues, why in the world would someone say that is a prior toty for the figs day in office is to put a bill in to rack up the deficit more to impose new taxes to fund political campaigns.

using your tax dollars to pay for political campaigns. i'm not for that. i think that is wrong. and i also would ask what cousin it have to to create jobs or effecting children. it has nothing to do with that. i would ask you in the audience to listen to what each of us is saying. there is nothing but insistence that everything is wrong but no prescription how to fix it come from mr. powell. i want to continue to say we have to start helping small business by lowering their taxes and make sure that regulation does not take over entrepreneurial spirit. we haven't got ton the discussion of obamacare. it's the outed most importance if we want to maintain the health care we know and make sure others have access to it. we want to make sure that it is repealed and replaces so businesses are not burdened by the onerous law.

>> moderator: mr. powell. powell: one example if big far ma hadn't give given your money, maybe you voted with medicare part d so medicare people would negotiate the prices for medicare prescription costs instead of keeping that large profit going to pharmaceutical companies instead of like medicaid and like the veterans' administration who is able to negotiate why? because the debt i.t. increased the deficit by almost a trail classer. you talk about spending we can cut. maybe if we can negotiate more with the companies that pay you not to vote the way you vote. maybe we can have more money left for infrastructure, schools, teacher pay, police officers, that is where we need it. it's not about regulation. we're not starting my law firm and other businesses i wasn't look at regulation. i was looking how to make a profit. that's what small business people look at. they're not saying what i can not codo did. that's the way american

entrepreneurial spirit is. you're so far removed for twelve years from reality, i don't think you know what a small business is unless it's a hedge fund. >> moderator: mr. powell, question for congressman cantor. powell: now this was a difficult thing for me, i have so say. people can tell i'm a bit passionate here. i was going to ask about the u.s. treasury bonds. not to do that or why you carved out the spouse exception or why you took $5 million. i decide the i would ask a question on a personal note inspect is for my son. this is for my son. last year when you and the president were in budget standoff, that threatened to shut down the federal government, you voted to continue paying members of congress including yourself in the event of a shutdown. at the same time you voted against a bill which ensure that members of the armed services

don't get paid. my question is this, eric, how could you in good conscious vote continue your own pay but at the same time vote to stop paying our service men and women that you voted to send in to combat. cantor: first of all none of that is untrue. and the offhand everyone's and the stock act and money that i allegedly took from mr. allison all that have is not true. again, we have got to make sure that we are with the facts here. okay. and you request go on your personal attacks all you want. but again, it's not doing anything to create a job. it's not doing anything to bring down the deficit. powell: ansz the question. cantor: if you let me speak. powell: you can speak. cantor: if you think about it that's what is wrong in washington. name calling, personal character assassination, doesn't get us anywhere and in fact it makes a job of trying to solve problems more difficult. now to the point that you're

trying to ask about, on military pay nobody and i in particular ever want to deny the pay to our men and women in uniform and frankly that's what is at stake with the sequester right now as well. okay. and we have got to make sure that we live up to the obligation without them we wouldn't be here. and i thank for your military service, wayne, and i thank for your son for what he's going for us. it does not go unnoticed. we're appreciative of. it. i can tell you every day, i go to washington and try and address the need of the veterans in fact in the house just this year unfortunately the senate hadn't taken it up so like many other bills the senate refuses to take up. we actually increased the veteran's administration budget by 4%. so we want to make sure that we help our veterans because they helped us for sure. but if you look at it right now, the veterans are facing the same

kind of difficulty all of us. unemployment is higher than the veteran community than it is in the community at home. the programs locally the troops to truck here in the richmond area where they have collaborated this is the kind of things we can do to solve the problems to get the veterans back to work once they come back there the service. >> moderator: mr. powell? powell: as expected, you didn't answer my question. that's all right because i think we already know the answer. however, one of the things that needs to be corrected here you voted get against a lot of veterans act. you talk about how you helped the veterans. that's not true. you voted against the suicide prevention program, voted against expanding some of the mm treatment for returning veterans e quaking of the mental and physical disabilities they came back with, and as for the suicide program, there are for every person killed killed in combat in afghanistan there are 18 people that commit suicide

every day in this country. 6500 a year. this is something that the congress, especially the house of representatives which is the closest to our people, you and the people outside the building should be addressing immediately instead of talking about make sure that paul ryan or mitt romney is 25 percent tax cut for millionaires goes through. you should be making sure there's enough money taking care of the veterans. you haven't in twelve years except for paying unfunded war,s and you haven't for the last three or four years. you won't. you kick did down the line and pretended like it supports vets. if you haven't put the uniform on and you haven't. >> moderator: congressman cantor. cantor: i think all of us who haven't served are grateful of your service. we want to help. those people who have given the ultimate in terms of over there fight forking our freedom. but i want to correct something

again, you're not listening. because we continue to try and address the needs of our veterans. and what happens in washington. often becomes a cut if it's not as much of an increase. we know that. and that's the problem with the spiraling of spending. it's about senting priertdties. can assure you that the veteran and the defense department is a priority. it's constitutional in the priority. we are going to live up to it.. >> moderator: mr. powell? powell: epa regulations will increase the cost of building coal fire power plants according to all accounts. they -- critics suggested that the new regulars will make it economically impossible build a new coal fire power plant again and could reduce the energy. do you support the new rule regulation on goal. do you believe coal is destined

to play a diminished role in america's future. powell: i don't know the regulations you're talking about. i'll take your word for it. i think we need to be my grating to renewable. i think that's the future. anybody who lives here this summer, and i take it most of you people lived in the state this summer knows it's one of the ten hottest years of the last 13. i don't happen to believe it's an accident. i think most of the scientists in the world don't believe it's an accident. the climate of the world is changing. the only plan elt so far we live in unless gingrich is right and we'll have a colony on the moon. as long as we are here, we have to whatever we can do save the planet. we have to ensure that our air is clear. do we not want to have clean air. of course we go. there were so many emergency air quality i can't count how many here in the richmond. i think the same way around the state. we have to look at the regulations to see if they hurt the coal industry as much as you say they are.

we have one of the best fields off of coast for here for wind farm. why aren't we trying to invest our money in wind farms or solar? i mean the sun the there for the next 90 million or billion years. npr one night. why aren't we doing what we can recycle and reuse. the days of the fossil fuels are numbered. whether we look at what's happening in the middle east or not. we have the national security issues related to the access to oil and we will ultimately have national security issues with regard to access to coal. if anyone is seeing anybody interviewed in beijing, china, they use a lot of coal, you cannot see outside the window of the person being interviewed. that. came up with in one show i was watching one day will there was so much polation. we have to keep clean air and water. we have the issues to with. we can't dismember the epa as eric has suggested. we need to look at the

regulations. i think we have to be regulating to keep our clean air. >> moderator: congressman cantor. cantor: again, let me start in somewhat rebut l. first of all, wayne said he doesn't know the epa rags. i know, he's come out for carbon tax. again, if you're looking at coal as the most affordable over time in terms of generating electric, a carbon tax is going to take that away. and the chamber restored this evening by saying we're interested in the competitiveness in america as the place to business. one of the real advantages we have is the indig house resources to fossil fuels we have to help afford lower cost of energy than anywhere else in the world. that is a cost advantage for us and the manufacturing base and yes to create jobs. so you heard mr. powell talk a lot about that and frankly didn't mention once how grow and

leverage off of these indigenous resources and doing it environmentally sensitive way. we have shell gas fines. which some of the experts are saying will makes energy independent for 100 years. and then mr. powell talked about offshore, we wants to put wind farms offshore. i can tell you the administration said it is impossible for is to drill for oil offshore. something the general assembly and the governor said we ought to do. it creates jobs and helps produce energy security for u.s. here in the united states. so bottom line, the epa is off base. okay. it is too lop sided in the regulation and just a few weeks ago we saw the by-product in that without the resources properly traded fortunate 500 companies chosen virginia to locate here is lay off 400 jobs in virginia because of epa rags. we can't go about addressing the number one issue which is job creation by the energy policy

you have heard from mr. powell tonight. >> moderator: mr. powell? powell: i imagine there are a lot of people who heard jfk about going to the moon. rein a place in our history, we need to be talking about about utilizing renewables. this is a milestone in our history. we cannot simply use the same old methods of extraction and he compares drilling for all of off the coast to putting a wind farm up. automatic the analysts have taunted wind farm. it's energy we're producing. if the country could be dedicated to the renewables to the moon race. it's a significant investment. at the ends, by the way, europe is doing it, china is doing it. why aren't we doing it? you employ up to 4 million people. we can convert our people. it's not immediate. if we convert our system to renewables we can employ more people than we can imagine. it takes thinks out of the box

and talking about people. only talking about the old not the new. >> as you mentioned almost all republicans have called for the repeal and replacement of obamacare or the affordable care act. yet certain provisions of the legislation preventing insurance companies from rejecting individuals individuals with preexisting con disiptions removing the lifetime cap and allowing children to be remain on the health care until they are 26 tend to be broadly popular. the legislation was repealed and replaced. do you favor keeping or mandating the tonightuation of the provisions. glarnt first -- -- officially known relies on a trail trillion dollars in tax hikes. they affect small business that have to pay out the money to uncle sam and not be able to pay for creation of job. two, over a half of trillion and mr. powell already referred to i'm going to mention that $7 00

billion that it took out of medicare and the reason why i oppose the way they took it out of medicare obamacare take it is out of the popular programs that mr. powell u just mentioned of prescription drug plan part d. it takes out of that. one of the most successful programs we had that come in contrary to his statement come in underbudget. but it also goes and takes money out of medicare advantage. something that seniors in our district are particularly fond of. but yes, we have to create a system where people can choose their own health care. none of us and i certainly don't acor support insurance companies denying coverage for preexisting condition. we can make sure it doesn't happen in a more cost effective way by establishing for they're not already there and funding by the federal government either high-risk poolings or reinsurance pools a the state level. we can afford competition so that the best way for a pay

shebt to have a kind of health care coverage he or she wants is to be able too leave the insurance company and go to next. right now there's not enough of that. we can create that flu cross state line purchasing we need to make sure we keep the lawyers out of the emergency room and coming from duolawyers, i can tell you, need to cut down the frivolous lawsuit. the cbo nonpartisan says that will save over $50 billion. so we can do this. and we can maintain the kind of benefits that bob spoke about so people can have the kind of health care they want. not what washington tells them. >> moderator: mr. powell? powell: i can think back to my mother who is no longer with us. i can see her going out and tryings to get a competitive bid on getting the insurance after the $65 00 voucher runs out in april or may of every year. that is what the cuts. the that's what the ryan budget

calls for. that's that you want. you are on your own, everybody, even people we have been taking care of. you are on your own. you'll get i am rand theory. and that doesn't work. it's taking care of our own. medicare is a good program. the 716 billion that is in the aid fordable care act you can call it obamacare i don't care. say you are going to repeal or replace. with what? it's pixy dust politickings. that's magical thicks. these are costs and the trail dollar taxes are taxes paid bit health insurance industry which gives you over i think close to a pll million dollars for the campaign is also for the hospitals, and also for the pharmaceutical people that gave you $627,000. they are the people that will be paying the taxes an the reason for the affordable care act. i don't like the mandatory provisions. however, we fled to sit down, we

meaning after you gone and i'm there. we need sit con and we need to talk about it and we need come up with a plan and make sure that we keep the best of the affordable care act. remove the cap. i have stories about that. i can't team them. i don't have times. there are stories about the lives and businesses that are saved. i know, there are people who employed because they are stay on their parent's policy until they are 26. instead of going throughout because of policy you supported back in the early 2000 which resulted in 8 million losses in jobs in the country. it is you cannot run on the record. so you to run on what you did. not what you think will happen in the future. where are the jobbings? >> moderator: congressman cantor. cantor: quickly trying to address misat the samestatements and inaccuracy. you spoke of your 80-year-old mother that passed away. the affordable care act is what we're talking about. the medicare changes wouldn't

affect a 80-year-old season we make sure that 55 older held harm less. inaccurate. you said the taxes are not paid by working people. the congressional budgeted office 90. percents of those pays the taxes because they didn't have insurance approve bid the government because the mandate you don't like but you like obamacare that requires people the way washington says. 80% of those equates to about $98,000 for a household of four. again, it's not being paid by some mythical big corporation that you don't seem to care for. it's paid for by working people. that's why the faxes are no good. obamacare needs to go. [applause] [applause] [cheering and applause] >> moderator: mr. powell. as congressman cantor mentioned earlier 19 percent of virginia

work force is tied to the defense industry. every analysis i have seen the automatic defense cuts contained contained in sequestration has the potential to severely harming the virginia economy. what is your strategy for deficit reduction that would not have far reaching negative effects on the commonwealth? powell: well, it's too bad he wasn't thinking about when he supported sequestration last year. you are correct. the way to avoid it we need to look at what the impact is in the state and every state as everybody here knows. virginia is dependent on the defense industry. i was here and i went to almost every military post in the state. however, i don't believe it will have that impact as severely as it needs to if we fake a scalpel and not an action. you can cut the sequestered funds from defense. there are 21 billion that have to be cut this year. you are look at aspects of the defense industry that are not located in virginia and that is what a congressman who works if

are the people in the state did you to work to help the working people of the state avoid losing their jobs. is you go to the committees and you go to the department of defense and it helps to know something about the department of defense to know what needs to be cut. my last tour was after 9/11, i worked very lose to many, many contractors. so m whom shouldn't have been working. some were lazy and never should have been taking any kind of money from the state government. they were two or three earning what i was. i'm in favor of the audit. there needs to be one. there are areas we need cut. i don't think the ultimate -- i hear there's going to be some magical meeting before the end of the year and i would say since the cang has been on leave two and a half months of the last three, obviously it's not a big priority for mr. can ton. he's on vacation and he was on vacation in five weeks in august. if it's an urgent issue. i believe it is an urgent

issue. 109 days not enough to meet. you have to sit down and look at the calculus. you have look at praments. you have to take a scalpel cut what you don't need. i don't that would happen if a congressman does what he needs to. cantor: he keeps saying i support sequester. as he knows, that's not true. he knows that the president insisted of the insertion in to the debt ceiling dell this country wouldn't go in default last august. and we were putting in a position where there's no other chase because the president didn't want to go long is beginning to address the real deficit issue which is health care entitlement presidentses again trying to solve problems very difficult in washington. we know that. the president said the only way you do is sequester. well, he then proceeded to really be ab sent from the discussions that went on in capitol hill and that committee was unable to resolve the

problem. so what we ed d is we went and said the house is too important. and i went over and just visited the chairman of joint chief of staff, mr. powell, and i asked him what does it mean a defense sequester mean for the national security of country. and he told me you have to rethink the nature of our being a superpower because it will not have the resources any longer to have the perspective of looking globally. and our homeland. so it's a scary thing this sequester. and it ought not go there. we ought to do if responsibly a are place the cuts. i'm hoping question get it done. now, the president supports a sequester and i know mr. powell said he's never going back away from supporting barack obama and he has his back. right, here he's saying he doesn't support him. he said repeatedly he supports barack obama. again, i think this is the question here we've got listen to what he is saying versus what

mr. powell has been saying for the last eight to ten months and full of these personal attacks about congress meeting or not meeting. and the sphact i don't think mr. powell understands what the congressman is about. because you do your best work when you're at home with the constituents and you visit small business people and you visit classrooms and working families and you begin to understand the problems they're having because washington is increasing the difficulty in their going about their lives. and the job of a congressman is to understand that and to see how we can make life work again for working people, small business, and families across this district and throughout the state and country. and again -- >> moderator: time finish, i'm sorry. cantor: i ask you to pay attention to the inconsistency he's talking about here just in the hour and that which he's represented over the cows of